LONDON, April 27 (Reuters) - British insurer Legal & General on Friday launched a unit to build affordable homes and said it aimed to build 3,000 homes a year within the next four years to become the country’s leading private provider.

Years of under-investment meant the country is producing 100,000 fewer homes a year than it needs, L&G said in a statement, while the annual shortfall for affordable housing is some 30,000 homes, leaving 1.3 million people on waiting lists.

Legal & General Affordable Homes, part of the insurer’s Legal & General Capital arm, would provide capital and work with a range of existing affordable housing providers to help manage the properties, it said.

“Affordable housing is a classic example of underinvestment with minimal new equity capital being deployed to the sector,” L&G Chief Executive Nigel Wilson said. “This is not a sustainable position.”

Many existing providers were highly leveraged and unable to raise equity to help maintain a sustainable financial structure, said Head of Affordable Housing Simon Century, a fact which limited their ability to grow.

“Legal & General Capital is building a more natural and sustainable model – one in which institutional investors are the long-term holders of the assets working alongside the best-in-class affordable housing operators who will provide the highest-quality housing management.” (Reporting by Simon Jessop; editing by David Evans)